Wall Street gains after Yellen, but Nasdaq drops

US stocks mostly rose after comments from Federal Reserve Chair Janet Yellen signaled continued support for the economy, but the Nasdaq fell for a second session as momentum names sold off.

Financials and utilities were the day's biggest gainers, with the S&P financial sector index up 1.3 percent and the utilities sector index up 1.6 percent.

The Dow Jones industrial average rose 117.52 points or 0.72 percent, to close at 16,518.54. The S&P 500 gained 10.49 points or 0.56 percent, to end at 1,878.21. The Nasdaq Composite dropped 13.085 points or 0.32 percent, to finish at 4,067.673.

After declining in the morning session, the Dow and the S&P 500 moved into positive territory after Yellen said the US economy was still in need of lots of support, given the "considerable slack" in the labor market in remarks to the congressional Joint Economic Committee.

Yellen's comments enabled investors to shift attention to what may be an easing of the tensions in Ukraine, as Russian President Vladimir Putin called on pro-Moscow separatists in Ukraine to postpone a vote on secession just five days before it was to be held.

The stock was the biggest drag on both the S&P 500 and Nasdaq 100 indexes a day after Whole Foods posted second-quarter results and cut its 2014 outlook.

In the latest snapshot of the US economy, the Labor Department said that US nonfarm productivity fell at its fastest pace in a year in the first quarter because of severe weather. That led to the largest gain in unit labor costs in more than a year. Productivity fell at a 1.7 percent annual rate in the quarter, the Labor Department said.

The FTSEurofirst 300 index of top European shares ended 0.1 percent up at 1,344.65 points after falling earlier in the day to 1,337.75, the lowest since late April. The STOXX 50 index closed at 2,967.69 points, up 0.28 percent.

Credit Agricole, France's third-biggest listed bank, rose 6.8 percent to top the FTSEurofirst 300 leader board after reporting a 30 percent rise in net income in the first quarter.

"European earnings have not been as good as U.S. company results in the first quarter, but their medium- to longer-term outlook is positive," Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets, said.

"European earnings will improve going forward as a lot of companies have cut costs and are now lean and mean, which means that their earnings will improve with an economic recovery."

The biggest faller on the FTSEurofirst 300 was Fiat Chrysler , which tumbled 11.7 percent as investors were unconvinced by its plan to boost sales by 60 percent by 2018 and almost wipe out its debt, analysts said.

Fiat's tumble helped drag Italy's benchmark FTSE MIB index down 1.3 percent, while a 7.5 percent drop in shares of aerospace and defence group Finmeccanica on the back of lower-than-expected earnings also took their toll.

In turn, Japan's Nikkei share average tumbled 2.9 percent to a three-week low on Wednesday, posting its biggest daily drop since mid-March, as a stronger yen dragged down exporters and concerns about Ukraine curbed investors' risk appetites.

The Nikkei closed down 424.06 points to 14,033.45, its lowest closing level since April 15. The broader Topix fell 2.6 percent to 1,152.01, with 2.1 billion shares changing hands, the largest volume since April 11.